TruCap Finance Limited (TRU) has announced a binding agreement to raise up to Rs. 105 Cr (nearly US$13.1 million) in a combination of equity shares, convertible warrants, and non-convertible debentures from Zeal Global Opportunities Fund. The fund raise would comprise of Rs. 80 Cr of equity and convertible warrants, while up to Rs. 25 Cr. would be infused through NCDs in the company.
Rakesh Sethi, Chairperson of the Board of TruCap commented, “We are delighted to bring on-board Zeal Global Opportunities Fund and appreciate their belief in TRU’s potential to tap the unmet MSME credit demand in India. The current funding round once completed will enhance the Company’s equity base to approximately Rs. 325 Cr. This will invigorate TRU’s efforts to build business at a greater scale with speed, while we continue what we do best, which is to empower small business owners by enabling credit inclusion through Lending-as-a-Service (L-a-a-S), with a robust risk management framework.”
“Focusing on an omni-channel approach and prioritizing customer centricity, TRU has evolved its ability to address multiple pain areas faced by underserved borrowers to access growth capital. It has managed to bridge the credit gap left unaddressed by traditional lenders in the MSME clusters of India. Having proprietary data acquired via disbursement of more than 100,000 loans, TRU has significantly reduced turnaround time, scaled sourcing capabilities, refined the qualification processes, and collections strategies for small businesses lending. We are impressed by TRU’s impact-led inclusion metrics demonstrated by serving new-to -credit borrowers and small entrepreneurs in tier 2 and 3 cities resonating with its motto of building lives and livelihoods,” said Ritesh Abbi, CEO, Zeal Global Opportunities Fund.
In conjunction with this funding round, TRU proposes to integrate the retail MSME lending vertical of Exclusive Leasing & Finance Pvt. Ltd. (EZ Capital) with itself. EZ Capital is a well-capitalised, North India headquartered NBFC, focused on providing secured and affordable finance to the MSME sector in India. It currently operates across 10 branches with 109 team members in Delhi NCR and Punjab. The Chairman of EZ Capital, Mr. V.K. Bhandari is a veteran banker, having retired in October 2003 as General Manager in-charge of Treasury, International Division at Central Bank of India after over 3 decades of distinguished public service. He currently serves as an Independent Director on the Board of 8 other companies. With the addition of EZ Capital’s retail MSME operations, TRU will gain a deeper presence in the Delhi-NCR region and enter Punjab to offer gold and secured MSME loans.
Speaking on this development, V.K. Bhandari, Chairman of EZ Capital remarked, “The combined expertise will foster deep sourcing, distribution, and servicing capabilities to build a pristine quality loan book, via L-a-a-S partnerships with banks and financial institutions to support inclusive economic outcomes for all. We look forward to leverage on each other’s strengths to build customer centric solutions and accomplish our resolve to promote financial inclusion. I am particularly excited about utilizing and building on each other’s internal domain knowledge and processes to create more resilient systems while harnessing growth, sustainability and keeping portfolio quality robust. This is an opportunity to offer wings to aspirations of countless micro, small and medium entrepreneurs in non-metros to herald a new chapter in the country’s growth story at a global stage, riding on tailwinds of improving economic activity.”
“We are very excited to partner with Zeal Global and EZ Capital in our mission to make a deep societal impact by providing access to timely and affordable finance to MSMEs in semi-urban and rural areas. This development will fortify TRU’s AUM, net-worth, and profitability. An enhanced equity base will further bolster our mission to address the rapidly increasing credit demand at the grassroots, especially with our recent expansion in Gujarat, which increases our presence to 7 States,” said Rohan Juneja, MD & CEO at TruCap Finance Limited.
TRU provides MSME business loans and MSME gold loans through a growing network of more than 67 branches in 6 key states, Maharashtra, Delhi-NCR, Madhya Pradesh, Goa, Gujarat, and Rajasthan. The Company plans to grow its branch network to 75+ by March’23. Till date, it has disbursed a total of Rs. 1,132 Cr across more than 121,000 loans to underserved businesses in India.